Hanjin Bankruptcy:
Global/Local Impact
John Bromley - May 10, 2017
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South Korea’s largest container line
Tenth largest container carrier
Owner and charter of container ships,
bulk carriers, LNG carriers and tankers
Owner of fourteen dock yards – four
in Korea, two in the USA, two in Japan
and the remainder in Spain, Taiwan,
Vietnam and Belgium
Difference from other insolvencies:
- large container line
- numerous shippers/consignees for each
container vessel
- numerous contracts of carriage which were
with Hanjin and not with the owner of the
ships (if not Hanjin)
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August 31 2016 - Hanjin files for Court protection in Seoul in order
to reorganize after banks withdraw support. The order
provides a prohibition on arresting or seizing a Hanjin asset.
Sept 1, 2016 – HANJIN VIENNA is due to leave Deltaport and is
arrested by Saam Smit.
Sept 1, 2016 – HANJIN SCARLET arrives at Prince Rupert but is
not allowed to come to berth until arrangements are made
for payment of harbour dues, berthage, wharfage and
terminal charges.
Sept 6, 2016 - Cosco and YangMing agree to pay the cost of
berthing the HANJIN SCARLET and the discharge of their
containers (about 400)
Sept 14, 2016 – HANJIN SCARLET arrested by DP World Prince
Rupert after the vessel returns to anchorage
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Caveats and arrest warrants are filed against the
HANJIN SCARLET BY
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CN
Prince Rupert Port Authority
Singamas Petroleum Trading Pte Ltd
KPI Bridge Oil Singapore Pte Ltd
ING Bank N.V. Singapore Branch
Pacific Pilotage Authority
Eco Intermodal
On September 6, 2016, the US Bankruptcy Court grants an order
recognizing and enforcing the Korean Court order in the US and
further preventing the arrest of any vessel operated by Hanjin.
On September 9, 2016 the US
Bankruptcy Court order is amended
to allow a cargo owner at its own
expense to obtain containers
not yet discharged or held at
terminals so long as the ocean
freight had been paid.
Similar orders are made by the
Courts of Germany, Netherlands, England, Spain and Italy.
As a result, the assets of Hanjin cannot be seized in those
jurisdictions. However, Hanjin needs to provide funds if it wants to
load/discharge cargo.
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On October 4, 2016 Hanjin obtained an order
of the BC Supreme Court preventing an action
from being taken against Hanjin or any action
affecting Hanjin’s business. However, the
order left the Federal Court actions active and
it was left to Hanjin to apply for a stay of those
actions.
It never did.
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Situation early October
No new actions against Hanjin assets i.e. ships
or containers possible without leave of the B.C.
Supreme Court.
2583 containers on the HANJIN VIENNA
destined for other ports.
Over 800 containers on the HANJIN SCARLET
destined for North America
Customers scrambling to obtain their goods
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Hanjin obtains court orders to have the HANJIN
VIENNA and the HANJIN SCARLET moved to berth
in Vancouver and the containers discharged.
The containers on the HANJIN VIENNA are to be
transshipped to the HANJIN SEATTLE
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Both the HANJIN VIENNA and the HANJIN SCARLET are returned
to their owners.
No hire had been paid to the owners of the HANJIN VIENNA since
April 2016.
January 18, 2017, owners apply for an order for sale of the ship and
on February 16, 2006 the HANJIN VIENNA is sold for US
$6,676,000.00
All of the in rem claimants are now seeking recovery of the amounts
owed to them from the sale proceeds and the owner is challenging
all of the in rem claims.
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ING Bank commences an action against the HANJIN
SCARLET on December 8, 2016 claiming
US$79,861,341.72
No mortgage payments had been made on the
HANJIN SCARLET since July 2016
The Bank has taken no action as of yet to sell the
ship.
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Hanjin owned and leased containers.
Those containers were all over the world.
DP World moved in February in the Federal Court to sell 243
Hanjin leased containers in its possession for demurrage and
other charges owing. Demurrage accrued at the rate of
$108.83 per day
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Shippers/consignees willing to pay charges owing on their
containers to get them released but sometimes found themselves
facing lien charges from Hanjin for previous shipments
Hanjin carriage terms stated
11. LIEN
(a) The Carrier shall have a lien on the Goods, for all freight,
dead freight, demurrage and the costs and expenses of
recovering the same and any other sums whatsoever
payable by the Merchant under this Bill of Lading or any
other Bill of Lading between Carrier and Merchant and may
enforce this lien, by all available means, including public or
private sale….
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It Ain’t Over
On March 8, 2017, DP World arrested the KMARIN
ATLANTICA which is the current name of the
HANJIN MAR. Caveat Releases are filed by
Prince Rupert Port Authority
CN
GCT
Ship is delayed by almost a week before security is
arranged and the ship released.
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Thank You
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